Fledgling online pharmacies in India fight brick-and-mortar opponents

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Online pharmacies in India are fighting back against a campaign by dominant mom-and-pop operations that want to keep the electronic avenue shut, the Financial Times reports.

The new entrants are mainly startups led by a new breed of retail marketing entrepreneurs who see massive opportunities to consolidate sales volumes away from hundreds of thousands of small drug stores that often lack digital tools such as bar scanners.

Leading the regulatory charge against online pharmacies is the Maharashtra Food and Drug Administration, a state-level agency that raided the Pune offices of PharmEasy this month, the Financial Times reported. The company told the newspaper it offers deliveries in 6 cities and prices as much as 20% lower.

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Another online pharmacy, Netmeds, has also been asked to explain its operations to the state regulator after raising $50 million from U.S. fund OrbiMed.

“What we are facing as online players is a witch hunt against the digital format,” Dharmil Sheth, the founder of PharmEasy, told the newspaper.

To that end, online retailers have set up the Indian Internet Pharmacy Association to lobby for wider recognition and fair treatment.

But the stores remain a powerful force in political and regulatory decisions with the ability to organize nationwide protests as seen in October last year when more than 800,000 brick-and-mortar pharmacies shut down across the country.

The online stores, however, said they represent a safer, easier and cost-effective path to help patients get medicines by employing registered pharmacists and delivering prescriptions to patients that suffer chronic conditions such as high blood pressure and diabetes.

The $13.4 billion domestic market for prescription drugs is now dominated by chronic diseases, which the Financial Times said are the only medicines being sold online for now.

India regulates the sale of prescription drugs through the Drug and Cosmetic Act, a law from the 1940s which is the subject of legislative review for reforms such as online sales and other areas.

- here's the story from the FT (sub. req.)

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